The Wall Street Journal reported Friday that BYD (OTCPK:BYDDF) plans to offer its most advanced electric car, the e6 model, in the United States in 2010 which is a year ahead of the company’s prior plans. BYD’s e6 sedan has been covered on The Rational Walk in some detail over the past few months. Click on this link for a list of articles related to BYD.
Introductory Price: $40,000
BYD has indicated that the price of the e6 will be set initially at $40,000 which is far higher than prior estimates. The Wall Street Journal article did not indicate whether this starting price was set based on the low initial projected market size or whether it has something to do with the projected price of the Chevy Volt which is also estimated to be in the $40,000 range. At $40,000, this vehicle will be priced at a very high premium compared to conventional gasoline vehicles or mass produced hybrid vehicles of similar size.
Sokol Interested in Boosting MidAmerican’s BYD Stake
MidAmerican Energy Holdings Chairman David Sokol stated that he has an interest in boosting MidAmerican’s holdings in BYD if the right circumstances exist. It is interesting how Mr. Sokol is assuming more of the limelight when it comes to Berkshire Hathaway’s ownership interest in BYD. Warren Buffett appears to be delegating more direct responsibility to Mr. Sokol in terms of management of the BYD investment as well as Mr. Sokol’s interim role leading NetJets.
The Journal article had a few interesting quotes attributed to Mr. Sokol:
MidAmerican Chairman David Sokol, who was also interviewed in Xian, said MidAmerican is ready to assist BYD’s foray into the U.S. auto market in “any way we could be helpful.” MidAmerican also might invest in BYD’s new initiatives in the U.S., which, in addition to automobiles, could involve solar panels and battery technology for power utilities.
Mr. Sokol also said MidAmerican hopes to boost its BYD stake if the chance arises. “If in the future there is an opportunity for us to continue to invest in BYD, we will be happy to increase our stake over time, but we will do it in cooperation with BYD,” he said. Mr. Wang said an increase is “negotiable.”
As I pointed out last week, General Motors and BYD have taken very different approaches to electric vehicles and the specifications for BYD’s e6 sedan still seem to give it an edge over the Chevy Volt. However, with the price point for the e6 coming in much higher than anticipated, it will be interesting to see how the market sorts out the competition. I remain hopeful that the Federal Government will resist the urge to stack the deck in favor of General Motors due to its substantial equity stake in the company.